Renzi conceded defeat after exit polls showed his proposal losing by a margin of about 60 per cent to 40 per cent in Sunday’s referendum

Italian Premier Matteo Renzi speaks during a press conference at the premier's office Chigi Palace, early Monday, Dec. 5, 2016. Renzi acknowledged defeat in a constitutional referendum and announced he would resign on Monday.Gregorio Borgia / AP

Italian voters dealt Premier Matteo Renzi a stinging defeat on his reforms referendum, triggering his resignation announcement and galvanizing the populist, opposition 5-Star Movement’s determination to gain national power soon.

“I lost, and the post that gets eliminated is mine,” Renzi said early Monday about an hour after the polls closed. “The government’s experience is over, and in the afternoon I’ll go to the Quirinal Hill to hand in my resignation” to President Sergio Mattarella.

Besides the “anti-establishment” 5-Stars, the outcome energized another “anti” party, the anti-immigrant Northern League, an ally of French far-right leader Marine Le Pen, a candidate in France’s presidential race.

In voting No, Italians also delivered a rebuke to Italy’s industrialists, banks and other establishment institutions, which had staunchly backed the referendum. The anti-reform victory, which could spook investors, comes just as the government had made some inroads in cutting the staggering rate of youth employment and while Italy’s banks have urgent need for recapitalization.

During the campaign, the risk of political instability in Italy, Europe’s fourth-largest economy, triggered market reaction, with bank stocks sinking and borrowing costs on sovereign debt rising.

But some analysts predicted the political crisis sparked by Renzi’s exit would be short-lived, as politicians focus on lining up support for a new electoral law they view as boosting their parties’ chances for whenever elections are called.

Wolfango Piccoli, a London-based analyst and co-president at Teneo Intelligence, said the main risk of Renzi’s “devastating defeat” will lie in the medium term.

That could see “a prolonged muddle-through period, the emergence of an ineffective patched-up coalition government in the post-election phase and continuously poor economic performance,” Piccoli said in an emailed comment.

The 5-Star Movement, led by anti-euro comic Beppe Grillo, spearheaded the No camp on the constitutional reforms, a package aimed at updating Italy’s post-war Constitution that Renzi had depicted as vital to modernizing Italy and reviving its economy.

Characteristically confident — detractors say arrogant — Renzi, 41, and Italy’s youngest premier, had bet his political future — or at least his current premiership — on a Yes vote win, and campaigned hard for a victory in recent weeks to confound opinion polls indicating that it would likely go down to defeat.

With votes counted from nearly all the polling stations in Sunday’s referendum, the No’s were leading Yes votes by a 6-to-4 margin, Interior Ministry data indicated. The turnout of 67 per cent was especially high for a referendum, and more in line for a vote for Parliament.

Renzi had been hoping to beat off the rising populist forces that have gained traction across Europe, as well as with the U.S. presidential victory last month by billionaire political outsider Donald Trump.

Leaders of the populist 5-Star Movement, which is led by Grillo, joined the chorus among opposition forces for early elections. The 5-Stars are the chief rivals of Renzi’s Democrats and are anxious to achieve national power for the first time.

“Today the caste in power lost,” said a 5-Star leader, Luigi Di Maio. It was a sharp retort to Renzi’s characterizing the reforms as an opportunity to shrink the “caste” of elite, perk-enjoying politicians by reducing the numbers and powers of Senators.

“Arrogance lost, from which we’ll learn many things in forming our team for government and our platform,” Di Maio said. “Starting tomorrow we’ll be working on a government of the 5-Stars, we’ll involve the energies and the free persons who want to participate.”

The 5-Stars’ constituency is largely internet based, and bills itself as anti-establishment.

In Bologna, traditionally a left-leaning city, about 100 people rallied after the defeat to burn several Yes-vote flags and carried a banner saying “Renzi go home.”

Mattarella, as head of state, would have to decide whether to accept Renzi’s resignation.

Renzi is widely expected to be asked to stay on at least until a budget bill can be passed later this month. Then he or some other figure, perhaps from his Democrats, Parliament’s largest party, could be asked to lead a government focused electoral reform.

The current electoral law would grant the biggest vote-getting a generous bonus of seats in Parliament.

Renzi’s Democrats and the centre-right opposition of former Premier Silvio Berlusconi want the law changed to avoid risking that the bonus would go to the 5-Stars should they lead the vote-getting.

Elections are due in spring 2018, but Renzi’s resignation could prompt their being moved up a year.

Another opposition leader, Matteo Salvini, of the anti-immigrant Northern League, hailed the referendum as a “victory of the people against the strong powers of three-quarters of the world.” He urged elections straightaway.

Many had read the referendum as an outlet for growing anti-establishment, populist sentiment in Europe.

When Renzi late last year promised to resign if the referendum was defeated, it was months before Britain’s David Cameron had made his ill-fated bet that a referendum would cement the U.K.’s membership in the European Union. Cameron was forced to resign when Britons instead voted to leave the EU fold.

In Italy, the referendum was required because the reforms were approved by less than two-thirds of Parliament. The reforms included steam-lining the Senate and giving the central government more powers at the cost of the regions.

“We didn’t exit from Europe, but we didn’t ’exit,’ from the Constitution either,” said former Premier Massimo D’Alema.

A former Communist, D’Alema opposed fellow Democrat Renzi on the referendum issue, aggravating tensions within their bickering party.